Bank of New York Slammed for Misrepresenting Standing

6.29.10Bank-of-New-York-v-Michael-Raftogainis[1]

Judge Todd also stated that additional discovery is to be produced when the foreclosure involves a securitization, lost note claims, or a holder in due course challenge (which may arise in the context of the purported assignment of a toxic loan to a securitized trust prior to the trustee of that trust instituting a foreclosure action, as well as any predatory loan claims against the original lender). Judge Todd recognized that there are dozens of legal issues and inquiries where a foreclosure involves a securitization, and that a borrower has both the right to know who owns the mortgage loan and whether a foreclosing party has the legal right to foreclose.

WHY TITLE AND SECURITIZATION REPORT IS SO IMPORTANT FOR FORECLOSURE DEFENSE

Posted on July 6, 2010 by Foreclosureblues

Editor’s Note….This case and outcome in favor of the homeowner was a direct result of obtaining an accurate title and securitization report from a qualified expert that contradicted the “alleged” evidence of the foreclosing plaintiff and provided substance that enabled the judge to rule in favor of the homeowner.

http://foreclosureblues.wordpress.com/

NEW JERSEY TRIAL COURT JUDGE ISSUES 53-PAGE OPINION DISMISSING FORECLOSURE COMPLAINT OF BANK OF NEW YORK AS SECURITIZED TRUSTEE: OPINION COULD PAVE THE WAY FOR AMENDMENTS TO NEW JERSEY RULES OF PROCEDURE REQUIRING FORECLOSURE COMPLAINTS TO BE CERTIFIED AND FOR FORECLOSING PARTIES TO PRODUCE SECURITIZATION DISCOVERY IN ORDER TO BE ABLE TO PURSUE FORECLOSURE

Today, July 06, 2010, 30 minutes ago

Jeff Barnes Esq.

July 6, 2010

In an extremely well-reasoned and detailed written opinion, New Jersey trial court Judge William C. Todd has issued a 53-page (yes, fifty-three page) Order dismissing a foreclosure action filed by Bank of New York as Trustee for Home Mortgage Investment Trust 2004-4 Mortgage-Backed Notes Series 2004-4, Docket No. F-7356-09, Atlantic County, New Jersey. The matter was decided on June 29, 2010 and the formal opinion was approved for publication this week after the matter was tried at the end of June, 2010.

The opinion sets forth an incredible analysis of a host of issues involving foreclosure in securitization contexts and highlights why a foreclosing plaintiff must comply with its obligations to prove standing in order to be able to pursue a foreclosure action. While we do not summarize the entire holding here, we do want to point out some of the significant findings.

The court found that there was no meaningful attempt by Bank of New York (hereafter “BONY”) to comply with applicable New Jersey procedural rules requiring a recitation of all assigments in the chain of title. BONY simple alleged that it had acquired possession of the note prior to the litigation being filed. However, the evidence at trial failed to establish this allegation, with the Court noting that there were missing documents incident to the securitization of the loan including the mortgage loan schedule that should have been attached to the mortgage loan purchase agreement. The Court also found that the “MERS assignment was potentially misleading”.

The Court found that there was a failure of proof as to BONY’s legal standing, warranting dismissal of the action and conditioning any refiling on a certification that the plaintiff is in possession of the original note at the time of filing. This is in line with the recent action of the Supreme Court of Florida which, as of February 11, 2010 by Administrative Order, requires all residential mortgage foreclosure complaints to be verified. It is no secret that Florida trial courts have and continue to dismiss foreclosure actions which do not comply with the verification requirement. It is hoped that the courts of New Jersey will adopt Judge Todd’s well-reasoned analysis and dismiss foreclosure complaints which do not comply with the New Jersey procedural rules requiring proof of legal standing to foreclose at inception and time of filing a Complaint for foreclosure.

Judge Todd also stated that additional discovery is to be produced when the foreclosure involves a securitization, lost note claims, or a holder in due course challenge (which may arise in the context of the purported assignment of a toxic loan to a securitized trust prior to the trustee of that trust instituting a foreclosure action, as well as any predatory loan claims against the original lender). Judge Todd recognized that there are dozens of legal issues and inquiries where a foreclosure involves a securitization, and that a borrower has both the right to know who owns the mortgage loan and whether a foreclosing party has the legal right to foreclose.

This incredibly significant decision will hopefully become the law in the state of New Jersey, and it is hoped that the Rules Committee for the New Jersey courts will soon adopt court rules requiring that all residential foreclosure complaints filed in New Jersey be accompanied by the filing of an appropriate Certification, and further requiring that all securitization discovery be produced in all foreclosure cases involving a securitized loan. We applaud and salute Judge Todd for his amazing effort to not only streamline foreclosure litigation in New Jersey, but also insuring that borrowers’ legal rights are protected as well.

Jeff Barnes, Esq., http://www.ForeclosureDefenseNationwide.com

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16 Responses

  1. A previous comment on the BONY-Raftogianis case noted that opinion has been approved for publication! Where can I get a certification of such as we want to use this.
    Thank you

  2. see my post under – Notes on Hearings I Attended – regarding Bank of New York, trustee, case.

  3. A.R.
    Thank you, for the site listing

  4. Can someone post the correct site to the 56 page judges order so that some of us can read it?
    Thank you

  5. or was it Angelo ? Can’t remember what his first name was. Just that he had a really bad tan !

  6. Yeah Jan. All those FOA (Friend of Anthony) loans. Sickening !

  7. When faced with a 56-page analysis refusing the plaintiff bankers the ability to proceed with a foreclosure, I suspect you will find that they will now simply sell the Note forward, at a discount, to some other outfit that will in turn attempt to foreclose.

    The spectacle of bottom-feeders buying Notes for pennies and then using the Courts as a big casino to turn those speculative pennies into big dollars will simply continue until Congress passes legislation stating that any mortgage that was ever held by an FDIC-insured institution, or which conformed the FNMA standards, cannot have claims made against the Obligor for more than the face value of the last sale of the Note. that kicks the speculators out of the chain. Until you do that, you will continue to see these frauds on the Courts perpetrated by the pond scum. Unfortunately, Congress “doesn’t get it,” because nobody is messing with any Congressman’s mortgage. Nope, those folks get cozy 3% loans from Countrywide. Sorry to by cynical, but that is just the way it is. Unless the public starts to really scream, of course.

  8. Judge Todd Stated that additional discovery was to be produced. I’m hoping they make an issue of the assignment of a toxic loan !

  9. Is declared or implied “intent” a requisite to effectively separate the Mortgage from the Note? And even if so, does the doctrine of unclean hands (blind greed in using MERS to deprive municipalities of lawful revenue and hiding real owner of the debt for self-gain) enter into the discussion about intent.

    Is it possible to accidentally, unintentionally or unknowingly separate the Mortgage from the Note? Is this a law whereunder the human condition faces no penalty for a mistake?

    On the bright side, Plaintiff’s will likely open a Pandora’s Box for themselves if they attempt to comply with the Judge’s Order.

  10. This I feel is fairly huge for the state of NJ. Regardless , the fact that a Judge is willing to dismiss a case even without prejudice. Hopefully NJ willl follow Judge Shack !!!!!! I feel encouraged by this .

    A.R.

  11. I have to second rose on this one. They will just refile and win the case because the defendants main argument “seperation” was shot down. And this might hurt many future defendants with this ruling.

  12. While I agree that the securitization analysis of this is important, and excellent, this is NOT a solid “Win” for the Homeowner.

    The judge dismissed this “without prejudice”. Meaning that now that they have the note, they can (and likely will) simply refile the suit. Nothing in the ruling prohibits the banks from doing that.

    While the judges ruling on standing is good for the majority of homeowners in NJ, this is, at best, a pyrrhic victory for these particular homeowners.

  13. Thank you Alina – you were out front on this. Many issues discussed in this case. Judge is truly trying to understand.

    Still, judge needs more – including status of current day in time. But, he is clearly on a right path. Love his comment regarding attorneys who obtain the note -just for the proceeding.

  14. R*E*P*O*S*T:
    Neil, link below for “raftogianis” File. DinSFLA had posted earlier….. This is the case Barnes is referencing without identifying it specifically.

    ———————————————————————

    DinSFLA, on July 6, 2010 at 7:34 am Said:

    @ LISA D

    the real questions now-are the loans actually in the hands of trusts as a matter of law as a result of failed filings and what happens to proceeds of collection of foreclosure proceeds??

    This post is a Must Read…Too long for me to post here…

    **********************************************

    http://stopforeclosurefraud.com/2010/07/04/must-read-missing-link-s-bank-of-new-york-v-michael-j-raftogianis/

    **********************************************

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